Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
Mortgage lenders will sometimes allow mortgage re-amortization to take place if a homeowner makes a large payment on their mortgage. When this happens, the lender is going to re-amortized the loan and recalculate the monthly payment.
How it Works
When you amortized a 30 year fixed-rate loan, they are taking the total amount that is owed and divide it by 360 months. Whenever you make a large payment, one of two things will happen. If re-amortization does not occur, this is simply going to cut down on the amount of time that it takes to pay off your mortgage. If they will re-amortized the loan over the same period of time, this is going to reduce your monthly mortgage payment because you do not have as big of a balance to pay off. It will also reduce the amount of interest that you have to pay over the life of the loan.
In order to be eligible for this type of process, you have to work with a lender that allows it. Typically, you will have to make a certain payment. For example, the lender might require you to pay $10,000 before they will re-amortize the loan.
- Should You Refinance? Make Sure the Timing is Right
- What To Do When Mortgages Default
- FHA Eligibility with Bankruptcy and Foreclosure
- Alternatives to Getting a 2nd Mortgage
- 3 Warning Signs of Loan Modification Scams
- Short Selling a Rental Property
- Second Mortgages: Advantages and Disadvantages
- 3 Factors that Can Negatively Affect Your Mortgage Application
- Low Down Payment Loan Qualification